The price of gold in Pakistan witnessed a significant increase on Wednesday, reflecting a surge of over Rs500 in the local bullion market. This rise was attributed to a sharp depreciation of the Pakistani rupee against the US dollar.
According to the All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) surged by Rs800 per tola and Rs686 per 10 grams, settling at Rs242,300 and Rs207,733, respectively.
During the previous week ending on June 30, the yellow metal had already seen an increase of Rs200 per tola in the local market, highlighting its growing value in Pakistan.
The association reported that despite the recent increase, gold remains competitively priced in Pakistan, trading under cost by Rs3,000 per tola compared to rates in Dubai. This disparity underscores Pakistan's position as a relatively affordable market for gold globally.
Internationally, gold prices also strengthened as the US dollar softened following dovish remarks from Federal Reserve Chair Jerome Powell. Investors, now focusing on the minutes from the US central bank's latest policy meeting, are anticipating future interest rate adjustments.
In global markets, spot gold rose by 0.7% to $2,344.60 per ounce, while US gold futures climbed by 0.9% to $2,354.20 per ounce.
Ricardo Evangelista, senior analyst at ActivTrades, commented, "Today's price gains are related to the softening of the U.S. dollar that came after the chairman of the Fed acknowledged in public that inflation in the U.S. is finally starting to move in the right direction."
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Meanwhile, silver prices in Pakistan remained steady at Rs 2850 per tola and Rs 2,443.41 per 10 grams.
The gold price in Pakistan is determined by the APSGJA, which sets daily rates six days a week (Monday to Saturday) based on international prices, the rupee-dollar exchange rate, and local demand-supply dynamics.
Despite being a net importer of gold, Pakistan's market reacts sensitively to global price trends and local economic conditions, influencing the daily pricing mechanisms adopted by the association.
